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Remarks by Deputy Attorney General Cole at the Arab Forum on Asset Recovery

Geneva

Switzerland

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Monday, November 3, 2014

Remarks as Prepared for Delivery

Thank you for inviting me to address the Third Arab Forum on Asset Recovery. I would also like to thank our excellent and generous hosts, the government of Switzerland. It is humbling to close a plenary that was opened by the president of this country, a leader whose contributions to international cooperation have been innumerable and invaluable.

Corruption undermines and weakens that which is the basis of modern society – the rule of law. Corrupt officials who put their personal enrichment before the benefit of their citizenry create unstable countries. Corruption siphons precious resources away from those in need at a time when such resources could hardly be more scarce and when the world economy could hardly be more vulnerable. The repercussions of corruption – the hospitals left unbuilt, the roads still unpaved, the medicine undelivered – undermine the integrity of democratic institutions, creating gaps in government structures that organized criminal groups exploit. And as we have seen time and again, countries plagued with corruption become breeding grounds and havens for other criminals and terrorist groups who threaten global security.

This is a reality that many of us have seen firsthand. I began my own career decades ago as a prosecutor in the Department of Justice’s Public Integrity Section. It was there that I prosecuted public officials including judges, legislators, and even prosecutors. It was there that I saw, as you all have seen, the acutely corrosive effects of corruption on a democratic system of government.

In the face of such challenges, our community of nations must continue to stand shoulder-to-shoulder in seeking to eradicate public corruption. This shared commitment of cooperation has never been more important. Investigations of, and prosecutions against, corrupt officials are highly complex and resource-intensive. International corruption cases are even more so. As you know, these investigations face significant challenges including the destruction of evidence, the intimidation of witnesses, the flight of corrupt officials and the concealment of ill-gotten gains.

In convening this forum, we – as a community of nations – have come together to collectively seek new avenues for communication and cooperation to combat corruption. Never before has there been an effort like this to bring G7 policy-makers and practitioners together with their counterparts in anyregion. You are the first. The Arab Forum on Asset Recovery was an untried idea, ambitious in its scope, and yet it has endured and inspired others.

Earlier this year when Ukraine was struggling to identify and recover hundreds of millions of dollars stolen by President Yanukovych and his regime, the G7 convened a Ukrainian Forum on Asset Recovery – UFAR – and based it on the Arab Forum model. It is a model that has been successful because of our shared commitment to fight corruption together. And that commitment has not faltered. Rather, it has been strengthened and renewed in each successive forum.

As we take stock of the progress that has been made, we must also look forward to the work that must continue and the results that we must still achieve. To fulfill the promise of this forum, financial centers and their Deauville partners must exchange evidence of underlying corruption, including information about illicit financial flows and the beneficial ownership of assets. These fundamental tasks can only be accomplished by working together. I am confident that the discussions over the past few days have moved us toward further progress in specific cases.

In addition, we all need to devote resources to building the institutions needed for effective cooperation, including the development of central authorities – the institutions that enable countries to effectively provide one another mutual legal assistance and extradition. Indeed, the United States is now working to increase the capacity of our own central authority with a request to our legislature for a significant investment that would allow us to respond to your requests with greater speed and efficiency.

And every country must continue to look at its legal authorities, whether for investigations, forfeitures, repatriation, or mutual legal assistance. Adoption of modern asset recovery tools like non-conviction based forfeiture is often critical in corruption cases. This tool can be used where the country has no jurisdiction over the corrupt person sufficient to bring a criminal case, but has jurisdiction over property obtained through corruption. The United States uses non-conviction based forfeiture to pursue corrupt assets when a defendant is dead, is evading the jurisdiction of the United States, or impossible to identify even though there is clear evidence of a crime.

Financial disclosure requirements for public officials can also provide an important evidentiary basis in asset recovery. In my own country, we like to say that sunlight is the best disinfectant. Requiring public officials to publicly declare their assets deters crime – the forms are often scrutinized heavily by journalists who are able to expose inconsistencies and bring them to the attention of law enforcement. For the truly corrupt who file false asset disclosure forms, those false statements can be important proof of an official’s corrupt intent, making our job to prosecute and recover stolen assets that much easier.

More effective legal frameworks for international cooperation are also needed to ensure that criminals cannot hide behind nominees, shell corporations and other legal structures to frustrate law enforcement. Such authorities must include mechanisms to provide evidence, especially financial records, without premature disclosure to investigation targets – a technique which we can all agree is essential. Similarly, as contemplated by the UN Convention against Corruption, countries need to have the legal basis to make disclosure of evidence of corrupt conduct or criminal proceeds, on their own volition, without a prior request. While this may require appropriate safeguards of people's privacy, we nevertheless need to make certain that legitimate law enforcement investigations are not frustrated by unscrupulous financial intermediaries.

To underscore the U.S.’s commitment to asset recovery, Attorney General Holder established a Kleptocracy Initiative in the Department of Justice. The Kleptocracy Team includes dedicated prosecutors working to forfeit corruption proceeds and, whenever we can, return those proceeds to benefit the people harmed by the corruption. The Kleptocracy prosecutors are soon to be paired with a dedicated Kleptocracy squad of FBI agents and analysts, and this squad will enhance the capacity of the United States to respond rapidly in investigating and locating corruption proceeds.

The Kleptocracy Initiative seeks to deliver on our responsibility to protect the integrity of the U.S. financial system and its institutions from the destructive influence of corruption proceeds and to deny kleptocrats safe haven to hide and enjoy their ill-gotten gains.

Some of you may already be familiar with the Kleptocracy Team’s work. Recently, the United States successfully concluded our litigation to recover assets acquired by the Second Vice President of Equatorial Guinea. As detailed in court papers, although he received an official government salary of less than $100,000 during his 16 years in public office, he amassed more than $300 million in assets through corruption, money which he used to buy, among other things, a $30 million California mansion and a Ferrari. In the end, he was compelled to sell his U.S. assets, including the house and the car, money which the United States will ensure is used for the benefit of the people of Equatorial Guinea.

This is but one recent example from a list of successful asset recovery prosecutions benefitting the citizens of other countries, including $20.2 million returned to Peru; $117 million returned to Italy; $2.7 million returned to Nicaragua; and, together with our partners in Switzerland, approximately $115 million used for the benefit of poor children and youth in Kazakhstan. I need to emphasize that we could not have achieved these successes without the dedicated efforts of our partners around the world working in cooperation with us.

As for our work with the Arab Forum and the Deauville Partnership Action Plan, we are proud to have dedicated two asset forfeiture attorney advisors to provide technical assistance on pursuing financial investigations. These attorneys will have taught 15 courses in 24 months in the region by the end of the year. This international effort is in conjunction with our partners at the State Department who in October 2014 contributed additional funds to the Deauville Partnership Program.

In addition, the Department of Justice continues to place experienced prosecutors in the region (UAE, Morocco, Egypt) and around the world to provide mentoring, training and relationship building that will aid the pursuit of illegal proceeds.

The United States is proud to stand with this assembly in protecting citizens from corrupt leaders and the corrosive effect of corruption on livelihoods and the rule of law. We owe our countrymen nothing less than our best effort. Thank you for all that you do, and may our commitment in this area never waver.